ECMA Announces Issuance of Groundbreaking Directive to License Securities Exchange in Ethiopia

Addis Ababa: The Ethiopian Capital Market Authority (ECMA) has announced the issuance of a groundbreaking directive that will facilitate the licensing of the first securities exchange in Ethiopia.

This significant development marks a milestone in the evolution of the country’s financial sector, poised to enhance the capital market’s contribution to economic growth, according to a statement issued by the Authority today.

The ECMA, an autonomous regulatory body established under Proclamation No. 1248/2021, has been empowered to issue directives in alignment with Article 108 of the proclamation.

This directive, titled ‘Directive on Licensing, Operation, and Supervision of Securities Exchanges, Derivatives Exchanges, and the Over-The-Counter Market No. 1009/2024,’ has been registered by the Ministry of Justice of the Federal Democratic Republic of Ethiopia and will come into effect on July 16, 2024.

This comprehensive directive outlines the documentation, terms, and requirements necessary to obtain a license
for operating exchanges and over-the-counter markets.

It establishes a supervisory framework for these exchanges, detailing the internal regulations, reporting obligations, and standards governing the process.

For the first time in Ethiopia, this directive will enable the licensing of securities and over-the-counter markets.

The Authority remarked that this move is expected to create a conducive environment for raising capital, supporting significant projects, and establishing a transparent and controlled trading system for service providers with market licenses to buy and sell securities.

Moreover, this directive consolidates the previously fragmented securities trading landscape in Ethiopia into a single, licensed, and regulated market. This integration is anticipated to enhance the sector’s contribution to stakeholders and the national economy. It also paves the way for the Ethiopian Securities Exchange S.C. to commence operations by granting an exchange license.

The ECMA’s mandate includes fostering
the development and regulation of the capital market within Ethiopia, aiming to enhance investor confidence, facilitate capital mobilization, and promote sustainable economic growth through robust regulatory frameworks and strategic initiatives.

Source: Ethiopian News Agency